In the last 3 minutes, I agreed to be the PTA liaison for my daughter’s classroom via text, finalized a detail for a donor meeting today via another text, and responded to a client email – all on my smartphone. It’s mind-boggling to consider how the value of time has been redefined in today’s world. A decade ago, I most likely would have made phone calls or written emails to complete each of these tasks. And, it would have taken me more far more than three minutes just to finish the niceties and greetings of my first call or turn-on and login into my computer.
The ever-pervasiveness trend of texting continues to create new expectations for compressing time while increasing productivity. So, why shouldn’t we use it to do our board work more quickly and efficiently, too?
It’s a logical assumption. Unfortunately, it’s also a dangerous one.
For now, for California-based nonprofit corporations, conducting board votes via text is illegal. In fact, it may surprise you to learn that it is barely legal to conduct board votes via email. California’s Nonprofit Corporation law (and hopefully your bylaws) state specific requirements for your board meetings and conducting board decisions electronically. The primary requirements are:
- Every board member must receive a reasonable notification of any board meeting to ensure that s/he is able to attend. (This measure prevents secret meetings where potential dissenters are not present to participate in discussions.)
- Every board member must be able to participate in a board meeting discussion simultaneously and be able to hear and be heard by all participants. (This measure ensures that all board members have an equal voice in the discussion.)
It is possible to host a meeting, therefore, using a teleconference line or a web-based meeting tool, like Skype. Even an email string that includes all board members and includes a time-frame that allows all board members to participate could meet the standards for a legal board discussion. However, when it comes time to vote, the Nonprofit Corporation Code includes specific definitions for what constitutes a legal electronic communication/vote (see here and here). Plus, there are a few other important legal requirements:
- An email vote must be preceded by an open discussion among all board members prior to any votes being cast (and, best practices should allow for continuing discussion after votes have been cast and before the final vote is finalized.)
- A board decision made by email is legally recognizable only if it is unanimous among all installed directors (except when a director must recuse him/herself due to conflict of interest or loyalty).
If your nonprofit wishes to conduct a board vote electronically, the following steps are recommended:
- Carefully consider if the issue/action is appropriate for an email vote or discussion. Generally, only those issues around which a very robust discussion has already been held or those issues that are routine for your organization should be presented for an email vote. For example, perhaps the board has had several meetings to design, review and approve the annual budget and two final edits were requested. Staff can make those clearly defined edits and then send the document to board members for a final email approval. Or, maybe you would like to ask your board to approve the minutes of the last board meeting via email. Most likely, little, if any, discussion would be needed for this type of routine board vote. In both of these scenarios, it is likely that all votes would meet the requirement for full consensus among all board members. A vote on any issue that is controversial or not routine should be postponed for a future board meeting.
- When presenting a vote via email, send one email to all directors that clearly defines the motion to be considered, who made the motion, who seconded the motion, and a deadline by which all individual votes must be cast.
- To conduct the vote, require all board members to submit their votes via email and copy all other board members when they do.
- Ask the board secretary to print all email votes received and include them with your minutes for ratification in your board minutes.
If a board member expresses concerns or requests additional discussion about the presented motion, defer the vote until a meeting can be held in-person (or via telephone/video conference).
If the email vote is not unanimous, it is not legal. HOWEVER, you can accept the vote that is given as a “straw-poll” and proceed with action, if appropriate. For example, perhaps you’re trying to pick dates for an upcoming event and you are asking the board to weigh-in. You can proceed with planning for the most popular date and then, in the next board meeting, ratify the decision by making a motion for the most popular date, securing a second and soliciting a vote. Hopefully, all board members will support the motion even if it is not a convenient date for all of them. Even if a board member dissents, the vote will be considered official as long as all the legal and bylaw requirements for conducting board meetings and votes are met. (e.g. proper notice was given for the board meeting, everyone could participate equally, a quorum was met, the vote was approved by the majority of the quorum, the vote is recorded in your minutes, your minutes are approved, etc.)
These requirements are cumbersome and confusing. We know. Please remember that Spokes is here to help you navigate your organization through them. Remember to start by reviewing your bylaws to ensure they are legally compliant and reasonable for your organization to follow. If you feel uncertain, let us know and we can review them for you. And – coming soon – Spokes will offer its members an exciting new tool to legally conduct electronic board votes much more efficiently. We can’t wait to tell you about and will include more information in upcoming newsletters. Stay tuned!